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Tax audits

Small businesses are audited more often than individuals.

Tax audits FAQs

  • How do I respond to an IRS audit notice?

    When you receive an IRS audit notice by mail, the first step to take is to not to ignore it. Carefully read the letter and make note of what the IRS is asking from you. They may ask for additional information or documentation. If you have access to the requested information, you may be able to easily respond. Usually, you will have 30 days to respond. If you do not have the information required, you'll need to determine how you may be able to extend the deadline. If you are responding by mail, use a delivery confirmation service to make sure that the IRS receives your letter. If you do not respond, or your response is not received, you may not be able to appeal your case. Your audit may be conducted in-person, by phone or by mail.

  • How will the IRS contact me about an audit?

    The IRS will contact you by mail. They will not contact you by email or telephone (unless an appointment is arranged). You or someone you know may have been contacted by someone falsely posing as a tax representative so you may be wondering how to know if the person contacting you represents the IRS or not.

    According to the IRS, they do not:

    • Make specific payment demands such as by a prepaid debit card, gift card or wire transfer. They will also not ask for your bank information over the phone.
    • Threaten or intimidate you by saying they will contact the police, immigration officers or other law enforcement officers.
    • Demand that you make payments without a right to appeal.
    • Request payment from you without sending a bill by mail.
    • Call you about a "surprise" refund.

    If you get a suspicious phone call you can contract Treasury Inspector General for Tax Administration (TIGTA) and the Federal Trade Commision to report the call. If you think you might owe the IRS, call 1-800-829-1040 to verify.

    To learn more about IRS phone scams, see Phone Scams Pose Serious Threat; Remain on IRS Dirty Dozen List of Tax Scams.

  • Should I attend my audit or hire a representative?

    You can attend your own audit, but some tax professionals warn that you may say things that are not in your best interest or you may not understand your tax obligations well. If your tax situation is simple, you may be able to manage your own audit. If your tax situation is complicated, you may want to hire a tax preparer to attend your audit for you. Or if you have anxiety about your audit, you may benefit from hiring a tax professional.

    A tax professional can greatly help you with your tax situation. They understand tax terms, are comfortable speaking with the IRS, understand your rights, are experienced negotiators, and more. If you hire them and give them limited Power of Attorney powers, they can act on your behalf.

    An IRS tax representative can:

    • Communicate with the IRS
    • Organize your paperwork
    • Protect your taxpayer's rights
    • Manage appeals if necessary
    • Identify critical parts of your audit
    • Negotiate your debt balance and payment arrangements

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